Mamata sets up Rs. 500 cr fund for duped Saradha investors

Facing intense public outrage over the Saradha Group scam, chief minister Mamata Banerjee announced a Rs. 500 crore relief package for those who had invested in the dubious company. But Mamata’s claims have raised questions on how and when the money can be returned to the depositors while a court case is going on.

“The government has formed a Rs. 500 crore relief fund to address those who have been affected. The committee probing the Ponzi scheme scam will prepare a database of the investors in Saradha. Based on the committee’s recommendations, we’ll identify the neediest among the depositors and help them out,” Mamata said at the state administrative headquarters on Wednesday.

Mamata said the state would provide all infrastructural help to the committee, which would come out with advertisements in newspapers. Investors would be asked to specify the amount they had deposited in Saradha.

Mamata said that, despite the erstwhile Left Front government and the Centre “financially draining” the state, she had found out means of generating the money. She announced that additional taxes on cigarettes would be imposed to make up for the relief fund amount.

“We’ve decided to increase taxes by 10% on cigarettes. But that will raise only about Rs. 150 crore. The balance amount will be raised by other means. In other states, tax on cigarettes is much higher than ours,” Mamata said. She refused to specify the measures the government would take to raise the remaining Rs. 350 crore. India’s biggest cigarette manufacturing company, ITC, refused to comment on the proceedings.

However, the political circles feel that Mamata’s claims are impractical, since the amount invested in Saradha is unspecified. Also, since the case is now in court, it will be difficult for the state to intervene and dole out money to the depositors.

When the Sanchayita Ponzi scheme went bust in 1982, there were similar soothing assurances of return of investors’ money. The investors were, however, promised a miniscule percentage of the money they had invested. But 31 years later, numerous creditors are still to receive their money.

Mamata also took this occasion to censure the Centre over the Ponzi scheme issue, saying that the law dealing with Ponzi schemes was a central law and not a state subject. “It is the ministry of information and broadcasting that permits channels and newspapers to go on air or print. They should keep tabs on which is run by a Ponzi scheme and which is not,” Mamata said.